It’s the peak time in summer for road trips — and for those looking to make their vacations more practical and affordable, a recreational vehicle can be the perfect solution.
But if you’re worried about bad credit preventing you from investing in an RV, you’re not the only one. Reports find that more than 30 percent of Americans have a credit score under 601.
We believe your credit score shouldn’t determine whether you’re eligible for pursuing a passion. So, here are a few tips to working around your credit score, finding an RV and hitting the open road.
Find an affordable model
First, start shopping.
Let your imagination run wild, for just a few hours, and look at your dream RV models. Now, responsibility dictates you shouldn’t send yourself into a black hole of debt purchasing a brand new trailer, but looking and researching a variety of sizes and styles will help you determine what you’re looking for. You may even consider heading to an RV show to see what options are available.
After you’ve daydreamed for a bit, start looking at what’s realistically in your price range and in your area. Don’t be afraid of older models, a good RV should last for decades to come — and you should always have a trusted mechanic inspect before you buy.
Save for a sizeable down payment
Once you’ve picked an RV and have a good idea of what price you’ll be paying, you should break out the checkbook and start creating a budget. Look hard at your expenses, what’s necessary, what’s frivolous and what you can start putting away for a down payment.
Most lenders require a down payment between 10% and 20%, so talk with your financial advisor about what would work best for your financial situation.
Get the right loan for you
Now that you have an RV picked out and know how much you’re ready to put down, it’s time to pick a loan.
Keep in mind that not all RV loans are created equal, so don’t sign up for the first one you find. Visit different financial institutions to see who is offering what and which one best suits your individual needs.
So, what credit score is needed to buy an RV? A score in mid-700s will attract more lenders and get you the best rate, but a good financial institution will work with you regardless of the score.
As for loan length, the loan term for RVs depends on the amount financed and the vehicle’s age. It can also be tailored to your individual needs in most cases. Plan on a term ranging between $25,000–$99,000 for eight to 15 years.
A survey by the Recreational Vehicle Industry Association of America indicates that 90% of RV owners take three or more mini-vacations each year and that travelers can save up to 62% in travel costs with recreational vehicles. Don’t let bad credit prevent you from fun and affordable road trips with the ones you love. Call your preferred financial institution today.